Tax Increment Financing (TIF)
Unlike a typical residential development, Beacon Hill will have very little non-recoverable development expenses due to Tax Increment Financing (TIF). The city of Spokane approved a TIF district in 2013 that includes all of the Beacon Hill development, giving the project access to $20 million in reimbursable funds across a 30-year period. Nearly all of the costs of Beacon Hill’s public infrastructure such as roads, water, sewer, parks, trails, lighting, engineering, and design will be reimbursable by TIF bonds.
Tax Increment Financing is a program that provides funding for needed infrastructure using real estate tax revenue generated by the increase in the assessor’s value created by the existence of the new infrastructure. Revenue comes a few years after the expenditure of the infrastructure. Essentially, in the first four years of the project the developer fronts the infrastructure costs and then recovers it in the later years. Once adequate development has occurred, the revenue from TIF is sufficient to reimburse the development expenses shortly after they are completed. BHS anticipates this occurring prior to the start of Phase II. Reimbursement is accomplished by the County of Spokane selling revenue bonds funded by TIF revenue and paying the proceeds to the developer for completed improvements.